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NZ government posts surplus for second year as tax take increases

Thu, Oct 13, 2016 - 9:01 AM

New Zealand's government reported a bumper surplus for the last fiscal year thanks to higher-than-expected tax revenue, but plenty of global risks meant policy makers will need to focus on reducing debt, the nation's finance minister said on Thursday.

PHOTO: NEW ZEALAND TRADE AND ENTERPRISE

[WELLINGTON] New Zealand's government reported a bumper surplus for the last fiscal year thanks to higher-than-expected tax revenue, but plenty of global risks meant policy makers will need to focus on reducing debt, the nation's finance minister said on Thursday.

The surplus for the 12-months to June 30 was NZ$1.83 billion (S$1.82 billion), much higher than the government's forecast in May for a surplus of NZ$668 million.

It marked the second consecutive year of surpluses, boosted by a NZ$3.8 billion rise in core tax revenue on solid economic growth.

Final figures are calculated on the basis of the government's operating balance excluding gains and losses (Obegal), which strips out unrealised investment gains or losses.

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Finance Minister Bill English said the outlook for the economy is positive and the government's books are in good shape. However, "there are a lot of risks globally" and therefore reducing debt levels remains key, he said.